USD/CAD 0.9841 on Tuesday, the pair’s lowest since May 3; the pair subsequently consolidated at 0.9860 by close of trade on Friday, shedding 0.49% over the week.
The pair is likely to find support at 0.9803, the low of April 30 and resistance at 0.9946, the high of August 28.
The greenback fell to a three-day low against the loonie on Friday, after Fed Chairman Bernanke said the persistently high rate of unemployment was a “grave concern”.
Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, he reiterated that the central bank was ready to provide additional policy accommodation as needed to shore up growth.
Official data on Wednesday showed that the U.S. economy expanded at a seasonally adjusted annual rate of 1.7% in the three months to June, slightly higher than the preliminary estimate of 1.5%, but remained below the 2-2.5% rate required every quarter to hold the unemployment rate steady.
Bernanke downplayed the risks of quantitative easing and said the program had been effective in providing “meaningful support" to the recovery.
In Canada, official data showed on Friday that the country’s gross domestic product rose by 0.2% in June, beating expectations for a 0.1% rise and following a 0.1% increase the previous month.
Meanwhile, sentiment remained supported by expectations that the European Central Bank is working on measures to help stabilize the euro zone's sovereign debt markets ahead of its upcoming meeting on September 6.
On Thursday, Italy saw borrowing costs ease at an auction of five and 10-year bonds, reflecting renewed optimism that European leaders are making progress in tackling the region’s debt crisis.
The loonie also found support as light sweet crude futures for delivery in October settled at USD96.44 a barrel by close of trade on Friday on the New York Mercantile Exchange, rising 0.35% over the week.
Raw materials, including oil account for about half of Canada’s export revenue.
In the week ahead, markets will be focusing on the ECB’s post-policy meeting press conference on Thursday, as investors await more details about the size and scope of the bank’s bond purchasing program from President Mario Draghi.
The U.S. is to release its monthly report on non-farm payrolls on Friday, which will allow investors to gauge the strength of the faltering labor market.
Ahead of the coming week, Forex trading outlook today has compiled a list of these and other significant events likely to affect the markets.
Monday, September 3 2012
Markets in the U.S. and in Canada are to remain closed for the Labor Day holiday.
Tuesday, September 4 2012
The U.S. is to publish a report by the Institute for Supply Management on manufacturing PMI.
Wednesday, September 5 2012
The Bank of Canada is to announce its benchmark interest rate; the announcement is to be accompanied by the bank’s rate statement, which contains insights into current economic conditions from the bank’s perspective.
Later in the day, the U.S. is to produce revised data on nonfarm productivity.
Thursday, September 6 2012
The U.S. is to produce industry data on non-farm employment change, followed by weekly government data on unemployment claims. The country is also to release a report by the Institute for Supply Management on non-manufacturing activity, as well as government data on crude oil stockpiles.
Friday, September 7 2012
Canada is to release official data on building permits, a key gauge of future construction activity, as well as on employment change and the unemployment rate. The country is also to publish an official report on labor productivity, followed by a PMI report by the Richard Ivey School of Business.
The U.S. is to round up the week with closely watched official data on non-farm payrolls and the unemployment rate, as well as a report on average hourly earnings.
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